PC milestone--notebooks outsell desktops

More notebooks than desktops were sold in the United States in May, according to a report released Friday--a milestone in PC sales history.

Analysts with research firm Current Analysis said laptop sales jumped to 53.3 percent of the total PC retail market in May 2005. Last year, notebooks made up 45.9 percent of the total PC retail market.

Occasionally, notebooks have outsold desktops, but those moments happen during a one-week period and are usually the result of extremely heavy promotions, Current Analysis said. May marks the first time notebooks have outsold desktops over the course of a full month, the firm said.

For example, the only time notebooks came even close to surpassing desktops was back in August 2004 when Toshiba launched an aggressive back-to-school advertising campaign. The resulting sales pushed notebook sales to 49.6 percent of the market.

Sam Bhavnani, a senior analyst with Current Analysis, offers three reasons for the increase in sales.

"The past few months have seen an increase in the number of retail notebook players, with lesser-known value players Acer and Medion gaining shelf space at major retailers such as Best Buy, Circuit City and CompUSA. In addition, notebook pricing has dropped considerably, almost 17 percent between May 2004 and May 2005 ($1,370 to $1,131), while desktop (prices) dropped only 4 percent in the same time frame ($728 to $696)."

Bhavnani also noted that Wi-Fi is no longer considered a luxury, but a necessity.

"One year ago, over 20 percent of retail notebooks did not include wireless. Today, that number is less than 5 percent," he said. "While Centrino laptops were frequently advertised in the $1,399 range last year, it is now common to see sub-$900 Centrino models in flyers."

The upward trend in notebook sales has prompted other analysts to adjust their expectations. Financial analyst firm J.P. Morgan bumped up its PC unit sales growth forecast for 2005 to 10.1 percent from 8.8 percent based on sales results in April.

Late last month, Gartner revised its forecast for the rest of the year. The analyst firm now expects PC shipments worldwide in 2005 to exceed 202 million units, up 10.2 percent from the previous year.